To continue to take perks’ lead HR needs to raise its game

Amanda Wilkinson, editor Employee Benefits: The median cost of providing pensions and other benefits now stands at a significant 15% of the total pay bill, according to the Chartered Institute of Personnel and Development’s 2007 Reward Management Survey. Yet for many organisations, employee benefits do not warrant their own standalone department.

So the task for many organisations is to find out what works best for them. But there is no right or wrong answer as to where benefits should sit in an organisation whether that is in HR, finance, or in some other location..

Traditionally, HR has managed benefits provision, but it could be losing its grip a little. The management of staff benefits is now often spread between different departments and functions producing a complex matrix of interests that can lead to confusion, lack of effectiveness and the absence of an overall management strategy for this large expenditure item that is crucial to a number of operational and employment matters, most notably, recruitment and retention.

Finance is increasingly claiming responsibility for employee benefits and challenging HR’s dominance. No matter which department has ultimate responsibility for benefits, all those that have a stake in it should operate together to ensure that the delivery of perks supports overriding organisational objectives.

One must remember, however, that it is the employees who ultimately implement any corporate goals. Therefore, HR has a key role to play even where it has relinquished day-to-day administration of certain benefits to other departments or functions such as payroll. It should take the lead in ensuring that there is a benefits strategy that it is aligned with the HR strategy, which, in turn, supports the corporate strategy. To help with the task, HR must learn the language of finance so that it is able to argue a much stronger case armed with both figures and business rationale.

Amanda Wilkinson, Editor